Introduction

Strategic management is considered as a process of setting of objectives, analyzing internal and external environment and framing strategies in accordance to objectives and then implementation of strategies across the organization (Rothaermel, 2017). In this report, PEST analysis is done for Irish Rail that is analysis of political environment, economic environment, social environment and technological environment.

PEST Analysis

Irish Rail operates in railway sector and has monopoly in the sector because it is governed by the republic of Ireland and by Northern Ireland railways.   The company operates in rail transport sector and was founded in 1987 and headquarters in Dublin and further its services are branded in three divisions that are Commuter, Intercity and DART (Irishrails,2019).There are various factors that affect strategic planning for the company some of them are explained below;

Political Factors

Political factors include laws in the country, taxation policy, political stability, safety and health regulations and government decisions. Most of the companies affected by political factors as these factors are different in each and every country for different industries. The political factors in Ireland that affect Irish rails are laws in the country as the company operates 547 carriages in the country (Irishrails,2019). Politically Ireland is divided into Northern Ireland and Republic of Ireland. Due to that Irish rail is operated by both the governments (Kerr et.al,2019). So there is political stability in the environment as the political instability leads to new policies and changes in investment budget by the government for railways.

Further, Ireland average tax rate is 23 percent; the government collects revenues from tax payers and this affect the ability to invest in railways. So change in tax rate also affects Irish rails.  The laws and regulation imposed by the government also affect the business operations, as at present the government imposed a 10km/h speed on the new cross city lanes (Britannica,2019). This affect the decisions of Irish rail as the company have to change its strategies.  Further, safety and health measures in railways are important aspect and that standards are set by the government any change in this affect the company. Irish rails already struggling to meet safety and security measures as complacency has no place within safety culture. There were 26 incidents reported because of lack of safety measurement by the company (Lloyd,2019).

There are many political factors that affect the Irish rails operations in Ireland, which includes political stability, investment by the government in railways and infrastructure development, changes in policies in transport sectors such as for air transport, road transport as this can affect the usage of transport in the country and leads to decrease in revenues of the company (Hayward and Meehan, 2016). The infrastructure of railways is developed by the government and change in government planning  related to infrastructure devlopement directly affect the company as the manufacturing and  launching of rails is done as per the infrastructure provided  and routes provided by the government. All the above political factors affect the Irish rails and its operations in the country.

Economic Factors

Economic factors that affect the business activities are interest rate, growth rate, inflation rate, employment rate and consumer spending. Brexit affected the labor market of Britain and this also affected the labor market in Ireland and due to that labor market declines and tighten there is low availability of labor in the market.  Unavailability of labor can affect the operations of Irish rails.  Three is increases in population of Ireland from 4.7 million to 4.8 million; this also can consider being an opportunity for Irish Rails as increasing population means more facilities are required by Irish people, with this people require more rail transport and this can affect the capacity of the company to deliver and supply more services.  GDP of the country is 3 percent and estimated to be declined to 2.8 percent by 2021, this affect the growth rate and investment by Irish rail also as the overall growth of the country slow down this affect each and every industry (Trading economics, 2019).

Inflation rate in Ireland is 0.8 percent at present and there is no estimation of any increase and decrease in inflation rate. The stability in inflation rate is necessary for the companies in order to reflect proper profits and revenues for the company. As inflation leads to increasing prices and fares in rail transport that is beneficial for the company but because of inflation consumer purchasing power decline as that leads to us of less services and decreases the demand by consumers. Further, unemployment rate in Ireland is increasing this affect Irish rails more as the labor are required in this industry and any change in labor market affect other industries that are iron, coal, and large and heavy industries, as from these industries raw material  are supplies to Irish rails any change in labor market affect this industries also and that directly impact on Irish rails production capacity (Smith et.al,2019). Investment rate or rate of spending by the consumers shows that the people are ready to pay the amount for services and this gives the opportunity to Irish rails to invest more in providing better services to people. All the above economic factors such growth rate, inflation rate,  level of consumer spending and employment rate impact on operations of Irish rails and need to be studied in order to identify the threats and opportunities that the company can  face and use in near future (Engelhardt,2018).

Social Factors

Social factors are all related to consumers and consumption patterns and factor that affect the purchasing decision of target market.  The social factors include religion and ethnic issues, attitude of people towards services, language, demographics of country, education level or literacy rate and living standards.  Analyzing the factors in context of Ireland for Irish rails, as rail transport cover almost parts of Ireland because of that people of Ireland are aware about Irish rail services and the company has good relationship with the public.  People are war about services and precautions that they have to take while using rail transport so attitude and behavior of Irish people in regard to Irish rail is already set and people love to enjoy their services. Further, area of concern in social factors is rail accidents and awareness to children about rail transport. Public   changed their opinion because of 26 accidents that took place in Irish rails last year, due to that behavior of people can be change and they might switch to other mode of transport that affect the public image of Irish rails and  can change the consumption pattern of people for rail services (Mccashin,2018).

Moreover, other mode of transport that is available for Irish people are road transport and most of high class people prefer to use cars rather than using public transport. This is the factor that affects the operations and demand for Irish rails in the market. Further, high class people of the country attitude towards public transport is not that positive this  leads to limited market reach for Irish rails. Rail transport is considered as the most used transport in the country and people have positive attitude towards it because of services provided by the companies and the infrastructure investment done by the government. Most of the people in the country have positive behavior and attitude towards rail transport and using it from a long time to satisfy their travel needs. Rail transport is considered as the environment friendly and safe services that help the society to travel at a reasonable cost from on destination to another destination (Todd,2018).

The above mentioned social factors are to be analyzed in order to know the threats and changes that the company has to make in order to meet the requirements of people. Social factors that can affect the company in Ireland and that are identified in the above analysis are changing behavior of consumers for rail transport,  preferences of  mode of transport by public and attitude of people towards rail services. Further, demographics factors of Ireland is an opportunity for the company as there is no such limitation on use of rail services and people of any age, gender, race, or family can us it without any limitations (Gilmartin et.al,2019).

Technological Factors

Technological factors at present are the factors that are affecting the business operations the most. The factors are legislation related to technology, access to internet, technology infrastructure provided by the government to business units, and quality of technology and internet, and rate of technological changes. All these factors affect the business operations. Looking into the technological factors that affect the Irish rail in Ireland that are use of technology in automation of rail services and providing better experience to customers. Irish rail used advance technology in order to serve customers and   to reduce its cost and to improve its running time Most of Irish rails in Ireland are automated and electronic trains. Use of technology in rail services improve customer experience as people take less time to reach its destination and this can help it to save their time and can get benefit from higher technologies and fast public transport (Irish rails, 2019).

Irish rails used technology in its rails to greater extent as most of the services in Ireland is provided by the company and offer 566 carriages across the country and serve more number of customers. This is considers as the strength for the company and it is the only rail services that offer   electronic trains and hi tech trains to fulfill the requirements of the customers in Ireland. Irish rails offer services from Dublin to Waterford and in many areas across the Ireland. But investment on technological aspects is affecting the profitability of the company as it is a huge investment and takes time to recover (Clifford et.al,2018). Due to change in technological factors the company is earning well as technological advancement reduced the time taken by trains to reach destinations that leads to more rounds in a day and carry more  passengers this can increases the number of passengers and the company can generate more revenues from use of technology. Further, government of Ireland in its national devlopement plan decided to invest in technological infrastructure for rail services, investment of more than €2 billion in the next decade (Bel and Joseph,2018).

References

Bel, G. and Joseph, S., 2018. Climate change mitigation and the role of technological change: Impact on selected headline targets of Europe’s 2020 climate and energy package. Renewable and Sustainable Energy Reviews, 82, pp.3798-3807.

Britannica (2019). Ireland government and Society. Accessed From: https://www.britannica.com/place/Ireland/Government-and-society

Clifford, M.J., Perrons, R.K., Ali, S.H. and Grice, T.A., 2018. Extracting innovations: mining, energy, and technological change in the digital age. CRC Press.

Engelhardt, J., 2018. Changes to the business breakdown structure of the railway sector in the European Union in the period 1991–2016. European Journal of Service Management, 27(3/2), pp.157-166.

Gilmartin, M., McGing, C. and Browne, K., 2019. Feminist and gender geographies in Ireland. Gender, Place & Culture, pp.1-8.

Hayward, K. and Meehan, E. eds., 2016. Dynamics of Political Change in Ireland: Making and Breaking a Divided Island. Routledge.

Irish Rails (2019). About Us. Accessed From: https://www.transportforireland.ie/irish-rail/

Kerr, N., Gillard, R. and Middlemiss, L., 2019. Politics, problematisation, and policy: a comparative analysis of energy poverty in England, Ireland and France. Energy and Buildings, 194, pp.191-200.

Lloyd, P., 2019. The Irish Railway Commission (1836–39) aiming to reform railways in the United Kingdom and to improve the governance of Ireland. The Journal of Transport History, 40(1), pp.123-140.

Rothaermel, F.T., 2017. Strategic management. New York, NY: McGraw-Hill Education.

Smith, A.S., Benedetto, V. and Nash, C., 2018. The impact of economic regulation on the efficiency of European railway systems. Journal of Transport Economics and Policy (JTEP), 52(2), pp.113-136.

Todd, J., 2018. Ethnic Divisions? Types of Boundaries and the Temporality of Change in Northern Ireland and the Republic of Ireland. In Identity Change after Conflict (pp. 43-69). Palgrave Macmillan, Cham.

Trading economics(2019), economic indicators of Ireland. Accessed From : https://tradingeconomics.com/ireland/indicators

Turnock, D., 2016. An historical geography of railways in Great Britain and Ireland. Routledge.